Monday, March 4, 2013

Kyle Lohse and free agent compensation

It's March, and Kyle Lohse — who went 16-3, 2.86 last season — still doesn't have a job. The head of the players union lays the blame on the new free-agent compensation system:

“While neither us nor the commissioner’s office have any legal obligation to bargain over that issue over the term of the basic agreement, I don’t think it was the intention of either side that you would have a player and you’d have clubs that would be interested in securing that player and be happy paying that player his salary, but would be stopped from doing it by compensation. That really wasn’t the intention.

“I can’t promise you that we’re going to be able to rectify it, but I know there will be discussions. It’s mostly good, but that part of it hasn’t worked out the way that we expected.”

Well, now. There's very little in the changes themselves that make it less appealing to a bidding team to pursue a free agent. What the changes did do was sharply reduce the numbers of free agents subject to compensation. Teams have to take a greater risk now to qualify a player for free agency; their payoff in draft picks is slightly less.

If Michael Weiner's point is that any compensation system distorts the market, he's right; if he's arguing that this specific system is more distorting than the previous one, he's wrong. To be fair, I think he's leaning toward the former, as he points out that the number of free agents tied to draft picks fell from 30 to nine.

What has changed for free agents like Lohse, to be blunt, is that teams have gotten smarter about free agency over the past several years — not only about the value of draft picks, but about investing in older players (Lohse is 34).

I detailed in December five factors inhibiting Lohse's market, and compensation is one of them, but most are variations on the premise that he really ain't that good. Lohse had ace-caliber results in 2012, but paying him on that level for the next several years is a bad bet. Those organizations stat-savvy enough to recognize the risk would avoid Lohse regardless of compensation.

Weiner hints that he'd like to revisit free-agent compensation before the basic agreement expires (2016), and since there's talk of revisiting the steroid-use penalties before then too, it might happen. I'm not convinced that there's really a system problem here, however.

Lohse and his agent (Scott Boras) misjudged the pitcher's market. That's the problem.